Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC) Q1 2024 Earnings Call Transcript

Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC) Q1 2024 Earnings Call Transcript May 14, 2024

Operator: Good afternoon and welcome to the Cyclacel Pharmaceuticals First Quarter 2024 Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. After today’s call, members of the financial community will have an opportunity to ask questions. [Operator Instructions] Please note today’s call is being recorded. I’ll now like to turn the conference call over to the company. Please go ahead.

Grace Kim: Good afternoon, everyone. And thank you for joining today’s conference call to discuss Cyclacel’s financial results and business highlights for the first quarter ending March 31, 2024. Before turning the call over to management, I would like to remind everyone that during this conference call, forward-looking statements made by management are intended to fall within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934 as amended. As set forth in our press release, forward-looking statements involve risks and uncertainties that may affect the company’s business and prospects, including those discussed in our filings with the Securities and Exchange Commission, which include, among other things, our forms 10-Q and 10-K.

All of our projections and other forward-looking statements represent our judgment as of today, and Cyclacel does not take any responsibility to update such information. With us today are Spiro Rombotis, President and Chief Executive Officer; Paul McBarron, Executive Vice President, Finance and Chief Operating Officer; and Dr. Brian Schwartz, Chief Medical Officer. Spiro will begin with an overview of our business strategy in progress. Brian will provide details on Cyclacel’s clinical program, and then Paul will provide financial highlights for the first quarter of 2024, which will be followed by a Q&A session. At this time, I would like to turn the call over to Spiro.

Spiro Rombotis: Thank you, Grace, and thank you everyone for joining us today for our first quarter 2024 business update. As previously reported, we have closed the financing for $8 million in gross proceeds in a private placement priced at the market per NASDAQ rules. With additional resources in place, we have begun dosing patients in the Phase 2 proof of concept part of our 065-101 study evaluating fadraciclib or Fadra for short in patients with one or more chromosomal abnormalities including CDKN2A and/or CDKN2B deep deletions or loss of function. You will recall that we are pursuing a potential precision medicine approach for Fadra or our CDK29 inhibitor following findings in our clinical and preclinical data, which suggest the hypothesis that patients with one or more of these chromosomal abnormalities may be sensitive to Fadra.

In the phase 2 part, we are evaluating patients selected for their mutational profile and/or Phase 1 activity in various solid tumors and lymphoma. We’re initially enrolling two patient cohorts, those with CDKN2A and or CDKN2B abnormalities, and also T-cell lymphoma based on observation of anti-cancer activity, including responses in multiple Phase 1 patients. We believe that there is great unmet medical need and industry interest in the cancer patient populations identified by these abnormalities which are closely located on chromosome 9 and are often co-deleted. CKN2A gene deletions occur in several solid tumors, including bladder, breast, endometrial, esophageal, glioma, head and neck, hepatobiliary, lung, including squamous, melanoma, ovarian, pancreatic, and also in certain T-cell lymphomas.

CDKN2B lesions occur in several solid tumors including bladder, the breast, cholangiocarcinoma, endometrial, esophageal, glioma, head and neck, hepatobiliary, lung including squamous and mesothelioma, melanoma, pancreatic, and others. There are no approved drugs to treat patients with CDKN2A or B abnormalities. We expect two key data readouts for Fadra this year. Final data for the dose escalation part of the 065-101 study to be presented at the ASCO 2024 Annual Meeting in a few weeks and report on initial clinical activity from the Phase 2 proof of concept part of the study in the second half of this year. I will now turn the call over to Brian to review our progress and discuss some of our clinical results in the Fadra study. Brian?

Brian Schwartz: Thank you, Spiro. In our recently completed 065-101 study, we determined the recommended Phase 2 dose for Fadra. As a reminder, this is 100 milligrams BID dosed orally five days per week in a four-week cycle. No dose-limiting toxicities were observed on the schedule. We have now dosed the first patient in the Phase 2 proof of concept part of the study with the initial focus of the cohort in patients with CDK2NA or B alterations. In order to speed up enrollment, we have opened additional sites with up to seven participating in the Phase 2. We expect to deliver initial results by the second half of 2024. As we progress through the Phase 2 study, let me summarize the rationale for our clinical strategy. We have observed CDKN2A or B alterations including loss of function in multiple pre-treated Phase 1 patients with various cancers.

These included gynecological, hepatobiliary, lung, pancreatic, and recently testicular who benefited from fadraciclib monotherapy. These patient groups are associated with a high unmet need and often have poor clinical outcomes. As an illustration, we were excited to see shrinkage of 22% in the sum of all target lesions of the one cycle of oral Fadra monotherapy in a squamous non-small cell lung cancer patient with CDKN2B deletions refractory to standard of care chemo and immunotherapy. A recently enrolled patient with advanced testicular cancer patient post surgery achieved a 12% reduction in the sum of all target lesions in the first cycle and continues on therapy now at cycle three. After retrospectively analyzing a subset of previously treated Phase 1 patients, we found a total of eight patients with CDKN2A or 2B alterations, all of whom experienced clinical benefit after Fadra monotherapy.

These included an endometrial cancer patient who achieved a CR and over three years of treatment on the previous IV fodder monotherapy study and was found to have CDKN2A and CDKN2B loss. We are also encouraged by Phase 1 anti-cancer activity observed in T-cell lymphoma patients, including PRs in two out of three patients treated, one of whom who had loss of CDKN2A. Literature suggests that a large percentage of T-cell lymphoma patients have loss of CDKN2A. Although the Phase 1 hypothesis generating data are limited and cannot be generalized, we believe that the data supports evaluating patients with these cancer types in Phase 2, proof of concept part of the study. I will now turn the call over to Paul to review our first quarter results.

Paul McBarron: Thank you, Brian. As of March 31st, 2024, pro-forma cash and cash equivalents totaled $9.9 million, which includes proceeds from this month’s private placement, and $0.8 million cash received for the second and final part of the United Kingdom Research and Development Tax Credit Claim for 2023. Cash and cash equivalents as of March 31, 2024 totaled $2.8 million compared to $3.4 million as of December 31, 2023. Net cash used in operating activities was $0.5 million for the three months ended March 31st 2024 which includes $2.9 million received in March in respect to the first part of the 2023 R&D tax credit claim compared to $6.9 million for the same period of 2023. Research and development or R&D expenses were $2.8 million for the three months ended March 31, 2024, as compared to $5.7 million for the same period in 2023.

R&D expenses relating to Fadra were $1.8 million for the three months ended March 31st, 2024, as compared to $4.1 million for the same period in 2023, due to a decrease in clinical trial and other non-clinical expenditures. R&D expenses related to plogo were $1 million for the three months ended March 31, 2024 as compared to $1.4 million for the same period in 2023 due to a decrease in manufacturing and other non-clinical expenditures. Expenses related to plogo will be greatly reduced in 2024 as we have paused the 140-101 study while a new salt formulation becomes available. General and administrative expenses remain relatively flat at approximately $1.6 million for each of the three months ended March 31, 2024 and 2023. Total other expenses net for the three months ended March 31, 2024 were $0.1 million compared to $0.2 million for the same period of the previous year.

United Kingdom research and development tax credits for the three months ended March 31st, 2024 were $1.4 million, which includes $0.8 million related to the 2023 claim, which as I mentioned previously, we have now received payment. Compared to $1.3 million for the same period of the previous year, and are directly correlated to qualifying research and development expenditure. Net loss for the three months ended March 31, 2024, were $2.9 million, which includes stock-based compensation expense of $0.2 million, compared to $5.8 million, including stock-based compensation expense of $0.4 million, in the same period in 2023. As we concentrate our resources on recruiting patients in the specific cohorts in the Fadra Phase 2 study, we anticipate that our expenditures in 2024 will continue to decrease.

The company estimates that its current cash resources will fund currently planned programs into the fourth quarter of 2024. Operator, we are now ready to take questions.

Q&A Session

Operator: [Operator Instructions] Our first question comes from Ahu Demir with Ladenburg Thalmann.

Ahu Demir: Thank you very much for taking my questions. Two from us. First one is what are we expecting to see at ASCO from the fadraciclib 101 study? Could you provide more color? How many patients are we going to see? Subset analysis and any additional information would be very helpful.

Spiro Rombotis: Thank you for your question, Ahu. I will turn over to Brian to answer the question on the ASCO content.

Brian Schwartz: Ahu, we basically planning to present almost the totality of the dose escalation portion of the study. The data [cut] (ph) was a couple of weeks ago, but we should have full data set around the Phase 1 dose escalation portion, including both the safety and efficacy seen so far. There will also be PK and PD included.

Ahu Demir: Thank you, Brian. And nice to chat with you again. Another question I have is on the proof of concept Phase 2 portion of the same study. We are expecting to see data later this year. Curious, what is the timeline? What are you going to present? And currently, how many sites are open, and what are your thoughts on the enrollment, how fast that might move forward?

Spiro Rombotis: Brian?

Brian Schwartz: We’ve just opened the T-cell lymphoma sites. They’re starting to open slightly different from the Phase 1 solid tumor sites. The solid tumor sites, we had already four sites enrolling, so it’s just opening an additional three. In terms of timing, these known mutations are sometimes difficult to determine the frequency, but we’re quite encouraged at the moment of patients being identified. We anticipate most probably by the end of the year, we’ve enrolled both cohorts.

Ahu Demir: Thank you.

Spiro Rombotis: Let me also add to Brian’s color, Ahu, that these mutations are readily available as part of standard panels. We do not need a companion diagnostic to identify the patient. Although the company is collecting data for future regulatory discussions. But the important point is that they are amply available and there is no approved drug to treat these patients once they’re identified with abnormality.

Ahu Demir: Very helpful. Thank you, Spiro. Thanks, Brian.

Spiro Rombotis: Thank you, Ahu.

Operator: We have no further questions in the queue at this time. I now like to turn the call back over to today’s speakers for any additional or closing remarks.

Spiro Rombotis: Thank you, operator, and thanks to all of you for joining Cyclacel’s first quarter 2024 earnings call. Fadraciclib has achieved a key milestone with the first patients dosed in the Phase 2 proof of concept stage with important catalysts anticipated in 2024 and a strong competitive profile in its therapeutic class. As a reminder, our upcoming key milestones are, report data from the dose escalation stage of the 065-101 study, overall Fadra in patients with advanced soiled tumors and lymphoma at the ASCO 2024 annual meeting. Report interim data from initial cohorts in Phase 2, open label proof of concept part of O65-101 study with oral Fadraciclib in patients with advanced solid tumors and lymphoma. We look forward to providing you with further updates and hope to meet some of you at upcoming conferences. Operator, at this time, you may end the call.

Operator: Thank you, sir. This does conclude today’s program. Thank you for your participation. You may disconnect at any time.